Strategic HRM in BMW: Practices, Challenges, and Overseas Production

This report provides a comprehensive analysis of Human Resource Management (HRM) practices within BMW, a leading global luxury car manufacturer. It examines key issues concerning people management, including the impact of increased workload, productivity expectations, and workforce strengthening due to business expansion. The report delves into HRM practices that encourage employee behavior, such as training and rewards, while also addressing the challenges arising from increased overseas production, like conflicts of interest and the need for equal opportunities. It explores the advantages and disadvantages of performance-related pay and evaluates the benefits of having an older workforce, along with associated problems and HR solutions. Furthermore, the report discusses McGregor's Theory X and Theory Y, Maslow's theory of human needs, Herzberg's hygiene and motivating factors, and the psychological contract, offering a holistic view of motivation and employee management within the context of BMW's operations and strategic goals. The report also identifies major managerial challenges in setting up an operations system to serve a fast moving and fickle market such as fashion.

BUSINESS MANAGEMENT

Table of Contents
PART A......................................................................................................................................................4
OVERVIEW..............................................................................................................................................4
Issues concerning management of people raised in BMW.......................................................................4
HRM practices that may encourage workers behavior-...........................................................................4
Increased overseas productions that affecting HRM policies..................................................................5
Advantages and disadvantages of performance related pay.....................................................................6
Benefits gained from a higher proportion of older workers by BMW.....................................................6
SUMMARY................................................................................................................................................7
PART B......................................................................................................................................................8
OVERVIEW..............................................................................................................................................8
Basic assumptions of McGregor's Theory X and Theory Y.....................................................................8
Explaining Maslow’s theory of human needs and their relation to ideas of Frederick Taylor.................9
Difference between Herzberg's hygiene and motivating factors..............................................................9
Describing the Psychological Contract..................................................................................................10
SUMMARY..............................................................................................................................................11
PART C....................................................................................................................................................11
Identifying major managerial challenges in setting up an operations system to serve a fast moving and
fickle market such as fashion.................................................................................................................11
REFERENCES........................................................................................................................................14

PART A
OVERVIEW
Human resource management is a practice of managing and monitoring an employee’s
productivity by the firm to let him work for achieving organizational goal. The current report
will be based on Human resource management and its practices in BMW, headquartered at
Munich Germany and also one of the biggest luxury car manufacturers in the world globally. It
will explain issues concerning management of people raised in the firm. It will also define the
image conveyed by the management and ways to encourage employees behavior to maintain
that image. The report will include issues affecting HR policies due to increased overseas
production with stating advantages and disadvantages of performance based pay. Lastly the
report will define benefits and problems of having older workforce in the firm.
Issues concerning management of people raised in BMW
Due to constant expansion in production and operations in the firm, the concerns over
management of its human resources arises (Aoki, and Rawat, 2020). These issues relates to many
causing factors which may influence the work base of BMW.
Issues-
Increasing work load - Successive extension of work base brought severe work load on
its existing employees. Many of them may have to work more than their official time to meet
business requirements. Such type of situations may create an negative environment for each
section of workers. Some of them may feel high pressure for managing their task.
Increase in productivity – With surge in work load, expectations of employees from the
management may also increase in terms of demanding increase in productivity. They may expect
rewards in the form of incentives, bonus or promotion as the firm is in expansion phase. There
are chances that they will feel demotivated when their expectations are not met, which will
directly impact the operations of BMW.
Workforce strengthening – With such a big expansion, the issue of hiring new people
may also become a concern for management of the firm. Recruiting new candidates will ease the

increased work base but it may influence existing employees. They will feel a burden of
performing in order to secure their position in the company.
HRM practices that may encourage workers behavior-
Image conveyed by BMW
The firm is one of the leading car manufacturer across the world with work base in
almost all the countries. It consists of a big customer base which is loyal to them. The enterprise
promises of giving utmost luxurious cars with all the services to its buyers. It also relies on
primarily focusing of queries regarding customer service. Employees played a very crucial role
in attaining this Goodwill of company in the market. BMW expects utmost dedication from all
its staff to maintain its status in business sector. The work base should be highly informed about
all the updates and information regarding their operations. Their work should be always directed
to achieving the organizational aims.
HRM practices to encourage that behavior
Training and development – To maintain the work flow, management may focus on
constant training of its employees to update them with all the latest innovations. Proper training
will help them to develop their professional skills which may motivate and encourage them to
work hard.
Rewards – The most common method of encouragement which should be performed by
the management is rewarding their employees. Reward includes providing perks to them like
increment in salary, bonus, promotion.
Increased overseas productions that affecting HRM policies
Conflict of Interest – As the firm is extending its production locations worldwide. The
situation of conflicts of personalities amongst its employees is rising. As the work base gets
bigger, number of employees may feel insecure regarding their position, work pressure
(Lössbroek, and Radl, 2019). In severe case the management had to face the loss of workers.
Equal opportunities policy – Due to increasing overseas productions, the operational
activities may take shifts from one sector to another. It will form a challenge for management to
provide equal opportunities to each department for extracting their performance. This may prove

to be a better scenario for organization as a healthy competition amongst all the sectors will
prevail.
Onboarding – Onboarding of more candidates to ease the workload is another effect of
increased overseas productions. The firm constantly conducts recruitment process to enlarge its
work base in various locations worldwide. It also impacts the operational costs of the firm on a
big basis as the HR department relies on selecting an appropriate skilled and qualified personnel.
Advantages and disadvantages of performance related pay
Advantages
 It encourages the employees to work hard, which may directly affect the performance of
the organization (Damman, and Henkens, 2020).
 It fulfills the criteria of rewarding employees on the basis of their performance which is a
crucial HRM policy in any organization.
 Performance related pay may also derive creative way of strategic application by its
workforce. This will result in improving productivity of the company.
 This method of appraisal may help the organization to retain its hard working employees.
Disadvantages
 While performance related pay may encourage certain employees, it also results in
demotivation or dissatisfaction amongst a section of employees regarding the
management.
 It also lead to exploitation of workers in certain areas to extract performance from them
in order to pay them.
 Performance related pay might enhance productivity and employee retention rate but
shell life of this method is for a relatively short term.
 Chances of risks regarding leaving of workers after getting their bonus is also very high.
Benefits gained from a higher proportion of older workers by BMW
Experience of staff is the key driving force of BMW. Older workers are the most
experienced section of work base in the organization (Blom, and et.al., 2020). All the policies
and proceedings regarding the operations are well known to them. Higher proportion of those

workers results in constantly improving productivity of the organization in the form of global
expansion.
Problems with older workforce and the practices of human resource to deal with them-
Insecurity – Insecurity amongst the older workers regarding personality clashes with other
staff members is a common problem for management. They may feel insecure of their place and
position as the work base expands. HR department should provide them a sense of authority to
keep them retained in this case.
Expectations – With the increasing workload, the expectations of older workers generally
increases regarding rewards for their experience in the form of hiked salary or promotion. The
chances of losing them increases if their requirements are not met. HR department should ensure
proper pay to all those workers depending on their experience and productivity.
SUMMARY
This report mentioned Human resource management and it practices. It defined issues
concerning management of people in BMW firm. It also explained the practices to encourage the
employee behaviour in an expanding company. The report justified that how increased overseas
production is affecting its HRM policies with citing advantages and disadvantages of
performance related pay. Lastly, the report stated the benefits and problems of having older
workers in the Enterprise.

PART B
OVERVIEW
The current report will be based on specific topic and that is leading by motivation. It
will explain basic assumptions of McGregor’s Theory X and Theory Y by McGregor The
assignment will define the Maslow’s human need theory and how each need relate to ideas of
Fredrick Taylor. Furthermore, it will explain the difference between Herzberg’s hygiene factors
and motivational factors.. Lastly the report will define psychological contract and expectations of
an employee from his employer on different basis.
Basic assumptions of McGregor's Theory X and Theory Y
Theory X and Theory Y are theories of human work motivation and management
developed by Douglas McGregor. These are basic assumptions which may be outlined from
these theories.
Assumptions-
Theory X – Theory X states the condition of a typical worker. According to this
management style an employee is very less ambitious, avoids responsibilities and works to
achieve individual goals, which make the firm believes that his work base is lazy and desires
sustainable income (Daneshfard, and Rad, 2020).
Theory Y – Theory Y states the condition of a motivated worker. According to this
management style an employee is highly motivated and dedicated enough towards achieving
organizational goals. The firm in this method believes that their staff is enjoying its job and
working to better themselves.
Flexibility of McGregor’s theories in different societies across the world-
These are the major factors which may differentiates the observation of these theories in
western societies to eastern culture.
Over generalize – The Y theory style tend to over simplify and over generalize people in
one way. For example – The theory states that employee’s joy of work at his job and developing
a strong relationship with his boss. This culture is different regarding the business environment

in eastern sector of the world where employees generally relies on hard work rather than smart
work.
Motivation from the job – These theories operates on the assumption that motivation is a
self-realization process for the employees. It is generally not the case in eastern society where the
motivation to work is provided by the managers through guiding and supervising its workers.
Explaining Maslow’s theory of human needs and their relation to ideas of Frederick Taylor
Maslow’s theory of human needs is a theory of motivation which states that behavior of a
person is gauged by his five components of human needs (Li, Chen, and Hui, 2019). Let’s have a
brief look at all those five aspects.
Psychological needs – Maslow states that basic psychological needs of a human are food,
shelter, health and money.
Safety needs – This factor denotes the basic safety needs of a human including protection
from violence and theft, emotional stability and wellbeing.
Love and belonging needs – The needs of humans belonging to friends and family is
stated by Maslow in this factor.
Esteem needs – These are the self-esteem and ego driven needs of human being which he
desires such as respect, confidence and authority.
Self-actualization needs – This set of needs includes education, development of various
skills and all those factors which a human desires to learn himself.
Relation between Maslow’s theory and Ideas of Fredrick Taylor-
Maslow’s human need theory was formed on the basis of basic human needs whereas
Fredrick Taylor’s idea of management directly relied on the needs of an employee. Therefore,
both the theories relied on describing basic wants of individuals.
Difference between Herzberg's hygiene and motivating factors
Basis of Difference Hygiene Factors Motivating Factors
Meaning Herzberg’s hygiene factors are
related to job and are essential
On the other hand Herzberg’s
Motivating factors helps an

at workplace (Chiat, and
Panatik, 2019).
employee to improve his
productivity and performance.
Absence Absence of hygiene factors at
workplace may cause
dissatisfaction amongst the
employees.
On the other hand absence of
motivational factors may lead
to unorganized work from
employees.
Consisting Factors It includes benefits such as
pay, fringe, working
conditions etc.
It includes recognition, sense
of belief to do a proposed
task, growth opportunities etc.
Organizational goals It includes all those factors
which indirectly relates to
achievement of stated goals by
a firm.
On the contrary these aspects
directly impact a worker's
mind to achieve
organizational aims.
Importance These factors are important in
order to provide a employee
with a better working
environment and helps the
firm to maintain a healthy
relations with them.
These factors are important In
order to derive performance
out of an employee which will
directly impact on company’s
productivity.
Describing the Psychological Contract
A psychological contract is a set of contract between the employee and his employer, this
contract is unwritten and defines the basic expectations between the job seeker and job provider.
Expectations from an employer
The basic expectations from an employee would be fulfilling his responsibilities of
providing a better working environment, appraising the hard-work at times, provide proper
training regarding the tasks and motivating to clear dissatisfaction. Another major desire will be
getting rewards such as bonus, increment in salary or promotion for a better performance.
Expectations from an employer providing a part time job

The basic expectations from the employer in this case will be getting acknowledged by him
of the studies processions which may limit the working hours sometimes. A better working
environment and stress free working procedures which will help to manage both work and
studies. Another major desire will be getting sufficient experience with trainings and extra
knowledge, that will help in seeking future job.
SUMMARY
This report mentioned the process of leadership by motivation. It defined Theory X and
Theory Y of McGregor. It also derived the limiting observation of this theory through Western
society in comparison with eastern business sector. It also explained Maslow’s human need
theory citing all its major components from an individual's point of view and its relation with
ideas of Fredrick Taylor. The report justified the difference between Herzberg’s theory
consisting of hygiene factors and motivational factors. Lastly, the report described psychological
contract and expectations of employee from his employer.
PART C
Identifying major managerial challenges in setting up an operations system to serve a fast
moving and fickle market such as fashion
Zara SA is a Spanish fashion retailer based in Galicia, Spain. The firm is one of the
biggest global chain which deals in fast fashion products including clothing accessories. It is
quite important for any company, whether it is small or large, to set up the best operations
system within workplace, which enable them to serve quick services to customers and strengthen
to provide quality products in changeable market such as fashion, in which varied popular brands
existed like ZARA.
While setting and implementing an operations system, management faces major
managerial challenges, which put negative impact on business productivity and performance
level of organization. Certain issue are;
Technical limitations-
It is one of the main concerns of management, in the context of setting up operations
system at workplace. Technical limitation is the biggest challenge that manager may face, while

setting up a system related to operational management (Ciampa and Nagel, 2020). It defined as
an inefficiency of either system hardware or software to achieve certain functionality, which may
put negative impact process of managing and increasing operational efficiency in ZARA.
Limitations create varied barriers in process of serving effective and valuable services to
customers in fashion market, which lead to decrease sales, profits margin and productivity of
brand.
High cost of system update-
It is another managerial challenge that operations management may face while taking
initiative to set up an operations system within ZARA, in order to serve quick moving fashion
market. Managing an operation system is not an easy task for any brand, whether it operate in
retail or fashion industry, because to continue the flow of work firm may take action to make
each system up to date, for which extra amount is require (Stankov and Tsochev, 2020). The
overall process of setting operations system along with providing benefits, bring challenges for
management in term of emerging demand in regard to program update that is quite expensive.
Operational sustainability-
There are several operations system available in the world of business that has been set
up by many companies within their workplace according to requirement and situations. ZARA is
one of the most famous fashion brand in the world, when its management attempt to set up an
operation system whether in supply chain or other operations of company, they may face those
major managerial challenges that affect business practices and strategic management planning in
negative manner. Operational sustainability is a challenge for the manager, which they take into
their consideration, in order to continue overall process which, enable them to serve quality
service and delivery products to fast moving fashion market.
Lack of understanding among workers related to an operation system-
Just because of poor understanding and knowledge among staff members relate to
operation system usage may bring another managerial challenge for operations management,
which make them unable to set and use it in systematic manner. Without having proper
understanding, it is quite difficult for authority within ZARA to continue the procedure of setting

up specific operation system at workplace. It leads to decrease operational and functional
efficiency of company.

REFERENCES
Book and Journals
Aoki, N. and Rawat, S., 2020. Performance-based pay: Investigating its international prevalence
in light of national contexts. The American Review of Public Administration. 50(8).
pp.865-879.
Blom, R. and et.al., 2020. One HRM fits all? A meta-analysis of the effects of HRM practices in
the public, semipublic, and private sector. Review of Public Personnel
Administration. 40(1). pp.3-35.
Chiat, L. C. and Panatik, S. A., 2019. Perceptions of employee turnover intention by Herzberg’s
motivation-hygiene theory: A systematic literature review. Journal of Research in
Psychology. 1(2).
Damman, M. and Henkens, K., 2020. Gender difference in perceived workplace flexibility
among older workers in the Netherlands: A brief report. Journal of Applied Gerontology.
39(8). pp.915-921.
Daneshfard, K. and Rad, S. S., 2020. Philosophical analysis of theory x and y. Journal of
Management and Accounting Studies. 8(2).
Li, Z., Chen, Z. and Hui, Y., 2019. Portfolio selection through Maslow’s need hierarchy
theory. Applied Economics. 51(4). pp.364-372.
Lössbroek, J. and Radl, J., 2019. Teaching older workers new tricks: workplace practices and
gender training differences in nine European countries. Ageing &
Society. 39(10).pp.2170-2193.